Gov. Phil Scott on Monday vetoed a pension reform bill while acknowledging the legislation is likely to become law despite his objections.
The legislature gave final approval last week to a plan that relies on one-time spending of $200 million to shore up the public pension system for teachers and state employees.
In return, the unions that represent these workers agreed to increases in pension contributions and modest cuts in benefits for future retirees.
Although Scott said he broadly supports the framework approved by lawmakers, he said the bill lacks the “structural” changes needed to deal with a $5.7 billion unfunded liability in the system. of retirement.
And because lawmakers did not agree to his proposed additions — the option of a 401k-style “defined contribution” plan for new state employees and a “risk-sharing” provision for all public servants. – he said he had no choice but to veto the legislation.
“Today’s veto is an affront to teachers, an affront to state employees and an affront to soldiers.”
Don Tinney, Vermont-NEA
“I recognize that this bill takes positive steps, and the easiest thing for me to do would be to sign it, assure the public that we’ve fixed the problem, and move on,” Scott said. in a veto message to lawmakers. “But given the magnitude of this problem and the risk it poses to the financial health of our state, I can’t bring myself to do that. It would be dishonest because I know we could have done better.
By vetoing the pensions bill, however, Scott has targeted one of the most popular pieces of legislation to come out of the Statehouse this session.
Democrats, Republicans, progressives and independents all united behind the proposal, which was unanimously approved in both the House and the Senate.
And in a joint statement late Monday, House Speaker Jill Krowinski and Senate Speaker Pro Tem Becca Balint said they plan to “override the veto quickly and leave no doubt as to our position in favor of the stability of our pension system and our public employees. .”
“We couldn’t be more disappointed that the governor vetoed S.286, the bill to stabilize the public retirement system,” Krowinski and Balint said. “We stand with our teachers and public employees in proudly defending the collaborative work we have done to tackle the looming pension crisis and protect our public pensions.”
Scott said Monday that he was resigned to the outcome of that notwithstanding vote.
“It’s unfortunate that this veto is easily overridden, not for me, but for Vermont taxpayers and state employees who will bear the burden of it in the future,” he said.
Administration officials have made a last-ditch effort to sell lawmakers on the revisions Scott proposed at a recent meeting of the Legislature’s Joint Pension Oversight Committee.
Committee members said the administration had not done any modeling to determine how a defined contribution option or risk-sharing provision would impact the long-term health of the pension fund.
And they said the bill, as passed by the House and Senate, represented a months-long negotiation between lawmakers and union representatives that could not be undone in the final weeks of the session.
“It just doesn’t make sense,” Wilmington Rep. John Gannon said of Scott’s proposals. “It’s like a poison pill.”
Last month, state treasurer Beth Pearce warned lawmakers against adopting a 401k-style option for new workers, saying research in other states suggests the proposal could increase overall pension costs.
The Vermont-NEA president released a written statement Monday afternoon condemning the governor’s veto as “rash and irresponsible.”
“It is unfortunate that after spending the past two years hailing teachers, state employees and soldiers as heroes of the pandemic, Governor Phil Scott rewarded them today by vetoing a bill to preserve their pensions and give them financial security in retirement,” said Don Tinney. . “Today’s veto is an affront to teachers, an affront to state employees and an affront to soldiers.”
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